at the intersection of business, parenthood, and music

The following is a guest post by a friend and fellow entrepreneur Julie Fergerson. We met several years ago while each of us was in the middle of our very own first high tech start-up. Julie is currently a VP at Debix. Debix provides services to help you monitor your credit. My husband and I signed up a while ago, and we recently signed up our kids. We were at her daughter’s 5 year old birthday party that she mentions below. We just got the results back for our kids who were part of a batch of 83 kids that were evaluated. Thank goodness our kids are safe but 3 of those kids had compromised credit. Check out Julie’s post below to learn more about how to protect your children’s identities.

Are Your Children’s Identities Safe?

Hi, my name is Julie and I am a mother of two little kids, age 2 and 5. I am also an executive at Debix, the Identity Protection Network, and have been chasing criminals and stopping fraud over the past decade. Recently, I helped design a new product to protect children’s identities. As usual with any new product launch (July 28th, 2008), I asked my friends at my daughter’s fifth birthday party to enroll and give me feedback on what they thought.

I was stunned to find that two of the fourteen children at the party (age 4 and age 9) had someone else using their identities. This hit so close to home that I decided to research the size of the problem.

So we scanned 500 children who were under the age of 18, and found that 1 in 20 kids (5%) already have someone else using their social security number. To put that in perspective, that means about one kid in every classroom in the US is a victim of identity theft. Worse yet, the average child victim had over $12,000 in debt and 12% of the child victims are age 5 and younger – shocking!

To ensure the results were accurate we hired Javelin Strategy and Research, a top-tier analyst firm to analyze the results and report their conclusions. You can download the research report here: www.debix.com/research.

As I talk about this problem with other Moms, the first question is always, “what does it mean that their kid is a victim of identity theft?” It means the child will not be able to use his credit when he needs it for things as important as college loans, first apartments or even a first job. As part of my research I met Lindsey, a college student at Texas State, who is living this problem. When she applied for her first internship competing against 400 other candidates, she was thrilled when she got the job and received the company welcome gift. Unfortunately a few weeks later, she received a letter rescinding her job offer – she was told she was not hirable because someone else was using her social security number. After what she calls “a full time job” of working to clear her name for six months, she was able to restore her identity and get the job.

The next question I get is “how can this happen? Surely companies know the social security number belongs to a kid.” The answer is no. There is no system in place to warn companies and the Social Security Administration does not publish a database of social security numbers with names and ages of kids. The social security administration has a formula for issuing a social security number, but you can’t tell the difference between a number that was issued to a 39 year old immigrant to the US and a newborn. About all you can tell from the number is the year and location it was issued (check out SSA Algorithm for issuing SSNs.)

It is our job as parents to protect our children and give them every possible advantage when they become an adult. We have to protect our kids as best we can so when they start out they have a clean record and aren’t starting adult life at a disadvantage.